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Exhibit 10.95
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
January, 1997, by and between Xxxxx X. Xxxxx (the "Employee") and HealthCare
COMPARE Corp., a Delaware corporation (the "Company").
IN CONSIDERATION of the mutual promises set forth below, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Employment. The Company hereby employs the Employee, and the Employee
hereby accepts employment with the Company, upon the terms and subject to the
conditions hereinafter set forth.
2. Duties. The Employee is employed as the President and Chief Executive
Officer of the Company and shall render his services at the principal business
offices of the Company in Downers Grove, Illinois, unless otherwise agreed by
him and the Board of Directors of the Company. The Employee shall have such
authority and shall perform such duties as are customary for the office to
which he has been appointed, including, without limitation, the full authority
to conduct and direct the day-to-day operations of the Company, subject to such
limitations, instructions, directions and control as the Board of Directors of
the Company or the Chairman of the Board of the Company (acting at the
direction or with the authority of the Board of directors) may specify from
time to time. He shall not otherwise devote time to the active pursuit of any
other business enterprise, nor shall he have any interest in any business
enterprise which is competitive with or adverse to the Company, whether as an
employee, officer, director, consultant, creditor, security holder or otherwise
(except to the extent permitted in Paragraph 8 hereof). The foregoing
notwithstanding, the Employee shall be entitled to belong to and participate in
professional organizations and to engage in professional activities in
furtherance of the Company's business.
3. Term. The term of Employee's employment under this Agreement shall
commence on January 1, 1997 and shall terminate on December 31, 1999 unless
otherwise terminated in accordance with the terms hereof.
4. Compensation. As compensation for the services rendered hereunder, the
Employee shall be entitled to receive the following:
a. Base Salary. Commencing as of the date of this Agreement, Employee
shall receive an annual salary of $900,000 ("Base Salary") payable in
installments at such times and in such manner as may from time to time be in
effect for executives of the Company, but not less often than monthly. The
Base Salary payable to Employee in 1998 and 1999 shall be increased in each
such year by an amount equal to the amount of the percentage increase, if any,
in the Consumer Price Index (as defined herein) during the previous calendar
year. Consumer Price Index ("CPI") means the U.S. City Averages for all Urban
Consumers, All Items, (1982-1984 = 100) of the United States Bureau of Labor
Statistics. The CPI for any calendar year shall be determined by averaging the
monthly indices for that year. If the Bureau of Labor Statistics substantially
revises the manner in which the CPI is determined, an adjustment shall
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be made in the revised index which would produce results equivalent, as nearly
as possible, to those which would be obtained if the CPI had not been so
revised. If the 1982-1984 average shall no longer be used as an index of
100, such change shall constitute a substantial revision. If the CPI becomes
unavailable to the public because publication is discontinued or otherwise, the
Company and the Employee shall substitute therefor a comparable index based
upon changes in the cost of living or purchasing power of the consumer dollar
published by any other governmental agency or, if no such index is available,
then a comparable index published by a major bank, other financial institution,
university or recognized financial publication.
b. Additional Compensation. As soon as practicable after the end of each
fiscal year of the Company during the term of this Agreement commencing with
the year ending December 31, 1997 in which the earnings per share of Common
Stock of the Company for such fiscal year (determined in accordance with
generally accepted accounting principles) ("EPS") increases by at least 10%
from the EPS for the immediately preceding fiscal year (the "Threshold
Increase"), the Employee shall receive additional compensation in an amount
equal to the product obtained by multiplying $36,000 by each percentage point
(or fraction thereof) by which EPS for such year exceeds the Threshold
Increase. By way of example, if EPS for 1997 increases by 8% from EPS for
1996, no additional compensation will be payable to the Employee; if EPS for
1997 increases by 21.5% from EPS for 1996, additional compensation in the
amount of $414,000 i.e., ($36,000 x 21.5% - 10%) will be payable to the
Employee. For purposes of this Agreement, EPS shall be adjusted in an
appropriate manner in the event of any stock split, stock dividend or similar
change in the Common Stock during the term of this Agreement.
5. Stock Options. Effective upon the execution and delivery of this
Agreement the Company shall grant to the Employee options to purchase shares of
Common Stock of the Company, each such option to be on the terms and subject to
the conditions of the respective stock option agreements (the "Option
Agreements") to be entered into between the Company and the Employee, the forms
of which are attached hereto as Exhibits 1, 2 and 3.
6. Benefits.
a. Benefits During the Term of this Agreement. In addition to the
compensation to be paid to the Employee pursuant to Paragraph 4 hereof, the
Employee shall be entitled to participate in all employee benefit programs
currently maintained by the Company as such programs may be modified from time
to time and each such other program or policy established by the Company from
time to time during the term of this Agreement for its employees and executives
generally (to the extent that it is more favorable to the Employee than an
existing program covering the same benefit). Employee shall be entitled to an
annual paid vacation of four weeks during each year of employment hereunder.
Unused vacation time shall accumulate from year to year, but in no event shall
the Employee be entitled to accumulate more than eight week of vacation time.
b. Benefits After the Term of this Agreement. The Company hereby confirms
the agreement contained in that certain Employment Agreement, dated as of July
1, 1993 between Employee and the Company (the "Prior Employment Agreement"), as
modified herein, to make available to the fullest extent permitted under law to
Employee and Xxxxx Xxxxx, his wife, for
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the life of each of them, at the Company's expense (subject to the limitations
set forth below with respect to Xxxxx), all employee health benefits
(including, without limitation, medical, dental, life, disability and other
similar plans) which are currently or hereafter established or maintained by
the Company from time to time for employees of the Company generally, and all
other health plans and policies established by the Company after the date of
this Agreement; provided, however, that (i) the Company's obligations hereunder
shall be suspended in whole or in part during all periods in which health
benefits at least as favorable as those to be made available hereunder are
provided at no cost to Employee or Normal Xxxxx as a result of the employment
of Employee by another employer subsequent to the termination of his employment
by the Company, and (ii) if health benefits at least as favorable as those to
be made available hereunder are provided to Employee or Normal Xxxxx as a
result of the employment of Employee by another employer subsequent to the
termination of his employment by the Company but Employee is required to pay
for such benefits, the Company, at its election, shall provide health benefits
to Employee hereunder or reimburse Employee for amounts actually paid to his
employer. The Company's obligations under this Paragraph 6b shall terminate in
the event the Employee's employment is terminated pursuant to paragraph 9c
hereof.
7. Reimbursement of Expenses. The Company, promptly upon receipt from the
Employee of appropriate documentation, shall reimburse the Employee for all of
his reasonable business expenses, including, without limitation, travel
expenses, necessarily and appropriately incurred in the performance of his
duties hereunder.
8. Confidentiality and Competition.
a. In consideration of the substantial benefits to be provided hereunder
to the Employee by the Company, and in recognition of the fact that the
Employee occupies a position of trust and confidence with the Company, the
Employee acknowledges that he has provided, created and acquired and hereafter
will provide, create and acquire valuable and confidential information of a
special and unique nature relating to such matters as the Company's trade
secrets, systems, procedures, manuals, confidential reports, employee rosters,
client lists, software systems, products, business and financial methods and
practices, plans, pricing, selling techniques, special methods and processes
involved in designing, assembling and operating computer programs previously
and currently used by the Company and the application thereof to managed care
programs and other related electronic data processing information respecting
the Company's existing businesses and services and those developed during the
term of this Agreement, as well as credit and financial data relative to the
Company and its clients, and the particular business requirements of the
Company's clients, including the methods used and preferred by the Company's
clients and fees paid by such clients. In addition, the Employee has developed
and may further develop on behalf of the Company a personal acquaintance with
the Company's clients, which acquaintances may constitute the Company's only
contact with such clients. For purposes of this Paragraph 8, the term
"Company" shall mean HealthCare COMPARE Corp. and each company which is a
subsidiary thereof and any partnership or joint venture in which the Company or
any such subsidiary owns an equity interest at any time during the term of this
Agreement. In view of the foregoing and in consideration of the remuneration
to be paid to the Employee hereunder, the Employee acknowledges and agrees that
it is reasonable and necessary for the protection of the goodwill and business
of the Company that he make the covenants contained herein regarding his
conduct during and subsequent to his employment by the company
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and that the Company will suffer irreparable injury if the Employee were to
engage in any conduct prohibited hereby. The Employee represents that his
experience and/or abilities are such that the observance of the aforementioned
covenants will not cause the Employee any undue hardship, nor will it
unreasonably interfere with the Employee's ability to earn a livelihood. The
Employee and the Company further agree that the covenants contained in this
Paragraph 8 shall each be construed as a separate agreement independent of any
other provisions of this Agreement, and that the existence of any claim or
cause of action by the Employee against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
the Company of any of these covenants; provided, however, that the covenants
contained in this Paragraph 8 shall not be enforceable by the Company during
any period in which the Company has wrongfully failed to make a required
payment under Paragraph 4a hereof. In the event a court of competent
jurisdiction determines that ny provision of this Paragraph 8 is unreasonable
as to duration, substantive extent or geographic scope, the provision will
nonetheless be enforced to the fullest extent reasonable.
b. The Employee, while in the employ of the Company or at any time
thereafter, will not directly or indirectly communicate or divulge, or use for
the benefit of himself or of any other person, firm, association or
corporation, any of the Company's trade secrets or other confidential
information, including, without limitation, the information described in
Paragraph 8a, which trade secrets and confidential information were or will be
communicated to or otherwise learned or acquired by the Employee in the course
of his employment with the Company, except that the Employee may disclose such
matters to the extent that the disclosure thereof is required: (i) in the
course of his employment with the Company, provided such disclosure is made
exclusively for the benefit of the Company, or (ii) by a court, governmental
agency of competent jurisdiction or grand jury.
c. During the term of his employment with the Company and for a period of
three years thereafter, the Employee will not contact, directly or indirectly,
with a view towards selling any product or service competitive with any product
or service sold (or proposed to be sold) by the Company during the Employee's
employment, any person, firm association or corporation (aa) to which the
Company has provided its services, or (bb) which the Employee or, to his
knowledge, any other employee or representative of the Company has solicited,
contacted or otherwise dealt with on behalf of the Company, nor will he
directly or indirectly make any such contact, for the benefit or on behalf of
any other person, firm, association or corporation or in any manner assist any
person, firm, association or corporation to make any such contact.
d. During the term of his employment by the Company and for a period of
three years thereafter, the Employee will not directly or indirectly acquire
any interest in any corporation, firm or business (other than the Company)
which is engaged in any business in the United States the same as, similar to
or competitive with the business of the Company as conducted at any time during
the Employee's employment, whether as an employee, sole proprietor, director,
officer, consultant, equity security holder or otherwise (except that he may
own up to 2% of the outstanding shares of capital stock of any corporation
whose stock is listed on a national securities exchange or is traded in the
over-the-counter market), nor will be Employee directly or indirectly have any
interest in any corporation, firm or business which is engaged in a business
adverse to the Company's business (except that he may own up to 2% of the
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outstanding shares of capital stock of any corporation whose stock is listed on
a national securities exchange or is traded in the over-the-counter market).
e. During the term of his employment by the Company and for a period of
three years thereafter, neither the Employee nor any entity by which the
Employee is employed or otherwise associated with will directly or indirectly
employ, retain the services of or induce or attempt to induce, an any manner
whatsoever, any present or future employee of the Company to leave the employ
of the Company and/or to seek or accept employment with the Employee or any
other person, firm, association or corporation.
f. In the event of a breach or threatened or intended breach of this
Agreement and the foregoing covenants by the Employee, the Employee
acknowledges that the Company will suffer irreparable injury and that
ascertainment of the exact amount of the Company's damages will be difficult,
if not impossible, and agrees that the Company shall entitled, in addition to
remedies otherwise available to it at law or in equity, to injunctions, both
preliminary and permanent and without bond therefor, enjoining or restraining
such breach or threatened or intended breach, and the Employee hereby consents
to the issuance thereof forthwith by any court of competent jurisdiction.
9. Termination of Employment.
a. Incapacity. If, during the term of this Agreement, the Employee should
be prevented from performing his duties by reason of illness or physical or
mental disability (hereinafter referred to collectively as "Incapacity") for a
continuous period of between 90 and 180 days, the Employee shall receive
one-half his perdiem Base Salary for each day during such time period that he
fails, due to his Incapacity, to render the services contemplated hereunder.
If during the term of this Agreement, the Employee should be prevented from
performing his duties by reason of Incapacity for a continuous period greater
than 180 days, the Company may terminate the Employee's employment hereunder by
giving written notice thereof to the Employee, effective on the date set forth
in the notice (which date shall be not less than 15 business days after the
notice is given).
For purposes hereof, a continuous period of incapacity shall not be deemed
interrupted until the Employee returns to substantially full time work for a
period of at least 30 days.
b. Death. In the event of the Employee's death during the term of this
Agreement, the Employee's employment hereunder shall be deemed terminated as of
the date of the Employee's death.
c. Cause. This Agreement and the Employee's employment hereunder may be
terminated at any time by the Company for cause. As used herein "cause" shall
mean (i) theft, embezzlement or fraud by the Employee or the Employee's
involvement in any other scheme or conspiracy pursuant to which the Company has
lost or could reasonably be expected to lose assets to the Employee or to
others calculated by the Employee to receive such assets, (ii) incapacity on
the job by reason of the use or abuse of alcohol or drugs, (iii) commission of
a felony or a crime involving moral turpitude, (iv) gross insubordination, (v)
unexplained and continuous absences from work, (vi) material breach by the
Employee of any of the provisions
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of this Agreement which is not cured within 30 business days after the
Company gives written notice thereof to the Employee specifying the nature of
such breach, (vii) refusal to act in accordance with a lawful and duly adopted
resolution of the Board of Directors.
d. Termination of Employment by the Employee. If, at any time during the
term of this Agreement, the Employee shall not be reappointed as President and
Chief Executive Officer of the Company but his services under this Agreement
are not terminated by the Company, the Employee shall have the right, by
written notice to the Chairman of the Board of the Company, to terminate his
services hereunder, effective as of the thirtieth day after receipt of said
notice, and the Employee shall have no further obligations under this
Agreement, except as provided in Paragraph 8 hereof. Termination of the
Employee's services pursuant to this Paragraph shall be treated as a
termination of employment by the Company other than for cause and shall be
governed by the provisions of Paragraph 10e hereof.
e. Termination of Employment by the Company. The Company may terminate
the Employee's employment for any reason deemed sufficient by the Company.
As used in this Paragraph 9, unless otherwise specified, the term "days"
refers to calendar days.
10. Effect of Termination of Employment.
a. Incapacity. If termination of employment results or occurs due to
Incapacity under Paragraph 9a, the Company shall pay or cause to be paid in a
lump sum (i) such amounts, if any, as the Employee shall be entitled to under
the Company's disability policy and program applicable to the Employee, (ii)
subject to the limitations set forth in the last sentence of Paragraph 6a
hereof, payment in respect of all unused paid vacation time, to the extent the
Employee has not prior thereto received compensation in lieu thereof, (iii) the
Employee's interest in all Company retirement and investment plans, to the
extent such plans permit such interest to be distributed and (iv) payment in
respect of all compensation earned to date but not theretofore paid.
b. Death. If termination of employment occurs as a result of the
Employee's death, the Company shall pay to the Employee's estate a lump sum
payment equal to (i) such amounts as the Employee's estate shall be entitled to
receive under the terms of retirement and investment plans of the Company, to
the extent such plans permit such amounts to be paid, (ii) subject to the
limitation set forth in the last sentence of Paragraph 6a hereof, payment in
respect of all unused paid vacation time, to the extent the Employee has not
prior thereto received compensation in lieu thereof, and (iii) payment in
respect of all compensation earned to date but not theretofore paid. In
addition, the Company will pay to his spouse for a period of 60 days an amount
equal to the Employee's per diem Base Salary.
c. Cause. If the Employee's employment is terminated by the Company for
cause, Employee shall be entitled to all earned but unpaid compensation,
provided, however, the Company shall be entitled to offset therefrom any
amounts lost by the Company as a result of Employee's action giving rise to
such cause.
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d. Voluntary Termination. If the Employee shall voluntarily terminate his
employment hereunder, the Company shall be obligated to pay or cause to be paid
in a lump sum (i) payment in respect of the Employee's interest in all Company
retirement and investment plans, to the extent such plans permit such payment
to be made, (ii) subject to the limitations set forth in the last sentence of
Paragraph 6a hereof, payment in respect of all unused paid vacation time, to
the extent the Employee has not prior thereto received compensation in lieu
thereof.
e. Termination of Employment Pursuant to Paragraphs 9d or 9e. In the
event that this Agreement is terminated by the Employee pursuant to Paragraph
9d hereof or by the Company pursuant to Paragraph 9e hereof, the Company shall
be obligated to pay or cause to be paid to the Employee (i) the balance of the
Base Salary payments required to be paid during the remaining term of this
Agreement, which payments shall be made at regular intervals in accordance with
the Company's regular pay periods, (ii) payment in respect of the Employee's
interest in all Company retirement and investment plans, to the extent that
such plans permit such payment to be made, and (iii) subject to the limitations
set forth in the last sentence of Paragraph 6a hereof, payment in respect of
all unused paid vacation times, to the extent Employee has not prior thereto
received compensation in lieu thereof. Payments pursuant to subsections (ii)
and (iii) shall be paid in a lump sum.
f. Effect of Termination of Employment; Survival. In the event that the
Employee's employment with the Company terminates, this Agreement shall be
deemed terminated, provided, however, that the terms and conditions of
Paragraphs 6b (to the extent provided therein), 8, 9 and 10 shall survive such
termination and be fully binding and enforceable.
11. Return of Documents. Upon termination of this Agreement for any
reason, the Employee shall deliver to the Company any property then in his
possession belonging to the Company. For purposes of this Agreement, the
parties hereto do hereby agree that any original or copies of any books,
papers, customer lists, files, books of accounts, summaries, notes and other
documents and data or other writings, tapes or records, relating to the Company
or prepared in connection with the Employee's performance of his duties
hereunder, are owned by and are the property of the Company.
12. Best Efforts. The Company and the Employee each agree to use its or
his best efforts to operate the business of the Company in a manner designed to
maximize the revenues and net income of the Company and to preserve and enhance
its goodwill and other assets.
13. Termination of Prior Employment Agreement. The Prior Employment
Agreement is hereby terminated.
14. Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid, with return receipt requested.
Mailed notices shall be addressed to the respective addresses shown below.
Either party may change its address for notice by giving written notice in
accordance with the terms of this Paragraph 14.
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(a) If to the Employee;
Xxxxx X. Xxxxx
HealthCare COMPARE Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
(b) If to the Company:
HealthCare COMPARE Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Madison Group Holdings, Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
15. Acknowledgment of Reading. The Employee acknowledges, represents and
warrants to the Company that he has received a copy of this Agreement, that he
has read and understands this Agreement, that he has had the opportunity to
seek the advice of legal counsel before signing this Agreement and that he has
either sought such counsel or has voluntarily decided not to do so.
16. General Provisions.
a. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Illinois.
b. Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective
during the term hereof, such provisions shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provisions had never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provisions or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part of this
Agreement a provision as similar in terms to the illegal, invalid or
unenforceable provision as may be possible and still be legal, valid or
enforceable.
c. Entire Agreement. This Agreement and the Option Agreements set forth
the entire understanding of the parties with respect to the matters specified
herein. No other terms, conditions or warranties, and no amendments or
modifications hereto, shall be binding unless made in writing and signed by the
parties hereto.
d. Binding Effect; Assignment and Assumption of Agreement. This Agreement
shall be binding upon the parties hereto and inure to the benefit of such
parties, their respective heirs,
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representatives, successors and permitted assigns. This Agreement may
not be assigned by the Employee nor may it be assigned by the Company without
the Employee's consent.
e. Waiver. The waiver by either party hereto of any breach of any term or
condition of this Agreement shall not be deemed to constitute the waiver of any
other breach of the same or any other term or condition hereof.
f. Titles. Title of the paragraphs herein are used for convenience only
and shall not be used for interpretation or construction of any word, clause,
paragraph, or provision of this Agreement.
g. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but which together
shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date and year first written above.
COMPANY:
HEALTHCARE COMPARE CORP.
By: ______________________________________
Chairman of the Board
EMPLOYEE:
__________________________________________
XXXXX X. XXXXX
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